Finances – Part III
Every now and then I am asked, “Where does your revenue come from?” It’s always good to know that people are interested. In Finances – Part II, I explained that 60% comes from our internal businesses, 15% by way of government grants, and 25% from fundraising activities and donations. This article will focus on the “donations” part of our income.
In 2016 and 2017 our “General Donations” accounted for just over half of the proceeds from our fundraising activities and donations category. Such funds come to us in a variety of ways. We receive individual one-time donations by cash, cheque, credit card or securities (shares); monthly donations through our website (www.mhv.ca) or by preauthorized debits from the donor’s bank account into MHV’s account; corporate donations; and bequests (being named as a beneficiary in a will). These are all appropriate ways to donate, and we welcome all of them.
Some of these donation methods would be considered “planned giving.” The concept is simply a matter of planning to make a gift, or provide an income stream, to a charity in the future. An example of planned giving would be naming a charity as a beneficiary in one’s will. This can be done in a variety of ways and needs to be discussed with one’s lawyer to ensure that it is done correctly.
Another form of planned giving would be through a life insurance policy. If a donor purchases and maintains a life insurance policy for which the charity is named as the beneficiary, that charity will eventually receive the proceeds of the policy without shortchanging the estate.
Some donation methods offer specific tax benefits. Gail Johnson, in an article in the June 28, 2018, edition of The Globe and Mail, discusses a variety of ways to minimize taxes through charitable giving. In addition to avoiding family squabbles, Ms. Johnson says, “If it’s [the life insurance policy] structured properly, the annual premiums can be considered charitable giving, meaning donors receive a tax credit each year.” One’s insurance agent would be able to provide advice on how to set up such a structure.
Ms. Johnson also comments on the benefits of donating stocks or securities directly to a charity. “Donating stocks that have accumulated capital gains can be advantageous, as you’re donating ‘pre-tax’ dollars.” When stocks are being donated to Mennonite Heritage Village (MHV), they are first directed to Abundance Canada, who then issues a tax-deductible receipt, sells the stocks, and sends the proceeds of the sale to us. This constitutes a "double win" for the donor - first, eliminating the capital gains tax on the stock gain and, secondly, providing a tax-deductible receipt on the increased value.
Ms. Johnson’s complete article, containing additional ideas can be accessed at https://www.theglobeandmail.com/investing/globe-wealth/article-giving-to-charity-choose-a-tax-savvy-method/.
We value every gift sent our way, and we call it a win-win situation when the form of giving offers benefits to both the donor and the recipient. Please feel free to contact me at [email protected] if you wish to discuss any of these matters in more detail.
Calendar of Events
September 3, Fall on the Farm – 9:00AM-5:00PM
September 6, Pickling & Canning Workshop – 7:00-9:00PM
September 13, Fermentation Workshop – 7:00-9:00PM
September 16, Open Farm Day – 9:00AM-5:00PM
September 20, Sourdough Workshop – 7:00-9:00PM